Dow Ekes Out Gain - TheStreet

Updated from 4:05 p.m. EST

Stocks finished marginally higher Tuesday in a tech-led rally, as the

Dow

and

S&P 500

crawled to new 19-month highs.

The Dow rose 3.26 points, or 0.03%, to 10,341.26, and has now closed at a new 19-month high in six straight sessions. In addition, the blue-chip index has risen in eight of nine sessions since closing above the 10,000 level on Dec. 11 for the first time since May 2002.

The S&P 500 rose 3.08 points, or 0.3%, to 1096.02, and the

Nasdaq Composite

gained 18.98 points, or 1%, to 1974.78. The Nasdaq rebounded mildly, after investor shifts out of technology stocks and into cyclicals throughout December. The technology heavy index is now in striking distance of its 23-month closing high of 1989.82 set on December 1.

Volume was very light on the final full day of trading before Christmas; 1.15 billion shares traded on the New York Stock Exchange, while 1.31 billion shares changed hands on the Nasdaq. Advancers beat decliners at about 3 to 2 on the NYSE and at nearly 2 to 1 on the Nasdaq.

David Briggs, head of stock trading at Federated Investors, doesn't think many people were driven to buy stocks following the morning's economic data, but "the sellers just didn't show up" either; "it looks like a typical Santa Claus rally, where the markets will drift upward until year-end."

Overseas markets finished mixed. The FTSE 100 in London added 0.4% to 4441, and Germany's Xetra DAX gained 0.7% at 3903. In Hong Kong, the Hang Seng closed down 0.5% to 12,421. Japan's Nikkei is closed for a holiday.

The 10-year Treasury note fell 27/32, its yield rising to 4.27%, following continued signs of economic strength and a reversion of flight-to-safety flows in the wake of the government's increased terror alert. The dollar strengthened to $1.2388 per euro, but was down marginally against the Japanese yen.

On Monday, the three major indices all closed higher. The Dow Jones Industrial Average added 59.78 points, or 0.6%, to 10,338, setting a new 19-month high for the fifth-straight session. The S&P 500 rose 4.27 points, or 0.4%, to 1092.94, another 19-month high of its own, and the Nasdaq Composite gained 4.78 points, or 0.3%, to 1955.80.

As expected, GDP growth was left unchanged at an 8.2% annualized rate in the third quarter. Personal income improved 0.5% in November on top of the 0.4% gain in the previous month, close to expectations. In addition, personal spending grew by 0.4% after an unchanged reading in October; this was below economists' expectations for a 0.7% advance.

The University of Michigan consumer sentiment survey was revised up to 92.6 from the initial reading of 89.6 in December. Economists had expected a smaller upward revision to 91. In November, the index hit its highest level in a year and a half.

Retailer

Target

(TGT) - Get Report

said Tuesday that its December same-store sales are running below plan for the week ended Dec. 20, which echoed rival

Wal-Mart's

(WMT) - Get Report

remarks on Monday. Nevertheless, Piper Jaffray reiterated its strong buy rating for the company because it believes there is still time to make up the sales shortfall. Target shares lost 13 cents, or 0.3%, to $38.03.

Internet retailers

Amazon

(AMZN) - Get Report

and

eBay

(EBAY) - Get Report

rallied today, following a report that online shoppers spent 48% more in the second week of December than they did during the same period last year. Amazon shares gained $2.59, or 5.2%, to $52.48, while eBay rose $1.05, or 1.7%, to $63.74, closing at an all-time, split-adjusted high.

After the closing bell,

Research In Motion

(RIMM)

reported third-quarter earnings of 31 cents per share, 14 cents ahead of analyst expectations. Bear Stearns lifted the stock to outperform from peer perform. Meanwhile, J.P. Morgan upgraded the same stock to overweight from neutral. Shares of the company jumped $23.51, or 51%, to $69.61.

Krispy Kreme

(KKD)

announced its new chief financial officer will be Michael Phalen, a former CIBC director of corporate finance who helped the company with its initial public offering. Krispy Kreme's previous CFO resigned to pursue personal interests. Shares of the company slipped 61 cents, or 1.6%, to $36.99.

Merrill Lynch raised its price target on

Qualcomm

(QCOM) - Get Report

to $60 from $50, on evidence that the company's WCDMA technology will eventually be rolled out. The shares advanced $1.27 cents, or 2.4%, to $53.52.

Finally, Lehman Brothers upgraded the metals-and-mining sector to positive from neutral. The brokerage is bullish on coal stocks, but bearish on several gold stocks.

Tomorrow, there are a few important economic releases. Initial jobless claims are expected to rise marginally to 355,000 from 353,000, but remain under the key 400,000 level thought necessary for labor market improvement for the 12th straight week.

In addition, durable goods orders are expected rise by 0.6% in November after jumping 3.3% in the previous month and new home sales are forecasted to improve slightly to 1.11 million from 1.105 million.

The equity markets will close at 1 p.m. ahead of the Christmas holiday.